Uh Oh

Mortgage rates are going to be going up at the worst possible time in the housing bubble deflation:

It now appears the 30 year fixed rate will move up to 6.75% to 7% this week. As an aside, I'm always amused when the article tries to explain why rates are moving.

Treasury yields (interest rates) hit five year highs today.

Ironically, I personally think that this rise in interests rates is going to be challenged, in short order actually, by weakening economic data. The headlines are all about a booming economy. But I just haven't seen data that backs that up, i.e. consumer spending which makes up 72% of GDP.

The conventional wisdom has been that energy prices just don't affect the overall economy like they used to. I think the economy may be less sensitive to energy prices, but I'm not sure how you can have a 40% increase in the cost of fuel and have it not affect prices .... regardless of economic growth.